1
August 20, 1906.]
of England, the CHANCELLOR of the Exchequer, some Treasury officials, and many bankers and big city men, that the gold reserves of the country were too small. If "Trade and Finance", whose prosperity he was toasting, were indeed to prosper, something should be done to increase the gold reserves. If memory serves, it is more than a few years since Lord GoscHEN began to preach from that text, and still things have remained in statu quo. His last was punctuated with cheers and applause, and yet the other speakers did not go out of their way to endorse his somewhat pessimistic view of what would happen if Britain, with its small gold reserve, were to be plunged into a big war. The CHANCELLOR of the Exchequer indeed appears to have been mildly chaffing his admittedly more expert predecessor, although taking care to speak humbly of his own qualifications. "He supposed that if the average man of business were consulted as to whom he should least choose as his spokesman and champion on an cecasion of that kind he would say that there were two figures whom he regarded with special repugnance -the academic economist and the forensic lawyer; and he regretted to have to admit that he combined both characters in his unhappy person." We cannot all be practical experts in finance, and
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AN OBSTRUCTIVE VICEROY.
95
CHINA OVERLAND TRADE REPORT.
was wanted in the United States, if gold was wanted elsewhere, where did they go to ? They did not go to Berlin, where they had an enormous su ok of gold, and he really could not
(Daily Press, 15th August.) quite understand how the bankers of Berlin
It was a good while ago that our Canton managed to evade the payment in gold of all correspondent began to note the difficulties the bills that ran upon Berlin, but there were of Viceroy SHUM in getting Chinese difficulties which were placed in the way. He engineers for the Canton-Hankow Railway. believed if any English banker were to remit, We had already anticipated those difficulties. say, two millions of bills upon Berlin to a Berlin Then came the amusing correspondence as banker and tell him to ship him back gold for to the relative merits of different foreign these bills the Berlin banker would decline the engineers, and the unconsciously disrespect- and pressure would be put upon the banks a pres commission. He would say it was not convenient,
ful way in which the Chinese referred to sure which his right hon. friend the Chancellor some as being cheaper than others made of the Exchequer could never exercise, that they Englishmen smile. Very little attention should not exhaust the Reichsbink
Here wa
has been paid to the appointments and were with enormous liabilities and with a smaller edicts publishe at Canton, for some time. stock of gold than any other country belt. Ha because it has been well understood thst all was inclined to believe that they were unanimous
were likely to be declared altra vires. It There were those who said there was no risk, seems, however, that the selection of Belgian that that was not a satisfactory situation. that we had gone on very comfortably with engineers for work on a railway that is 80 the gold reserve as it stood, and why should we
nuch indebted to British capital was re- disturb it?
We had gone ou very comfortably, garded as too improper even to be allowed indeed, since the year 1890; but there had been to be discussed without official protest, and times when that comfort had been rudely that His Excellency the GOVERNOR the disturbed by crises and catastrophes; and let it Railway Governor, as he may very likely be not be thought, though at present a great nicknamed by future historians of the current of trade and finance was going on on a
Colong-caused the VICEROY to be remind- sound basis, that those times might not recur." Business men also accept things as they are.
el of his obligations. The reply of Viceroy Academically, they are quite willing to SHUM might have been forecustel to a admit that intrinsically the gold reserves
coinina. This satrap, who has been more Po more represent the wealth or resources diligent to cripple the undertaking that, of a country than its bills and banknotes Sir MATTHEW NATHAN has been to foster do, and that various expedients could bait, tells the British CoNSUL that the Govern devised in a crisis to avert any panic ment having in its wisdom transferred incidental to our artificial system of barter. control from himself to the merchants, these If he were Something, for instance, on the lines matters no longer conearu him. that Lord GOSCHEN
less chagrined, less sarcastic, and more to suggested exist in Germany. But
sincere with regard to leaving the business have the system, and a
to those who have provided the funds, very useful and convenient system, so far, however Viceroy SHUM's answer would not have seemed so impudent. As it is, there caunot complicated it may be,
as
"
We
they cannot
the slightest doubt that so long as Viceroy SHUM remains in Kwangtung the
waste time on academics. A diminished gold reserve agitates finance the bow about augmenting it? asks Lord GosCHEN, merchants must
and they cheer. But an increased gold
vet in such matters in which we are all mcre or less interested
we cannot always remain dumb. The academic economist ", therefore, is allowed to say his say, and business men willingly listen, although they very properly do their own thinking. The academic economist often remarks that trade and finance are not Siamese twins, that the health of one need not depend upon the coudition of the ther. Lord GosCHEN denounced any theory which would dissociate the prosperity of finance from the prosperity of trade. We admit that there is undoubtedly a com- munity of interest; finance is certainly no mere parasite on trade; if we were seeking a familiar illustration of their relationship, as it presents itselt in modern times, we should say that finance played jackal to the lion of trade. It has made itself very use- ful indeed, though not, the academic ecouo- mist would say, indispensable, and it deserves its reward. But Lord GoSCHEN, siderations of the theorists, is too much concerned with existing practice to dwell on the possibility of politics diving as deep as the theorist.
who must be familiar with the basic con-
reserve
missed?
means more unemployed capital, Who has to sacrifice the interest that is Therein lies the secret of the inactivity following Lord GoSCHEN's preaching. It is the position of China and the Powers over again. They cannot agree amongst themselves, and FO nothing practical results. Meanwhile business goes indifferent, because in blissful ignorance on very satisfactorily, the great bulk of it of the peril that Lord GosCHEN declares to It looks to the academic economist as if it really doesn't matter much to the genuine producers and tradesmen of the country whether there is a gold reserve or
exist.
It looks to him, indeed, as if Lord GoSCHEN was simply indulging in hyperbole when he perorated:"
་་
"They could not forget," he said, "that not. every bill which was held by the National Discount Company, every liability which had been undertaken by our great banks, every transaction which was being carried on in the vast structure of British trade and commerce, was dependent upon payment in gold. It might be there was a certain light heartedness, men
'It was not a question only for the City of London, but one which affected the whole trade of the country. It was a question which affected the well bei ig of finance and trade, What was finance nowadays? They were not merely a might forget that all that they held, al the group of City men endeavouring to enrich them. resources on which they depended, really de- selves and simply to increase their private pended upon the amount of gold which might fortunes; many of them were stowards and ultimately le available for payment; and administrators of the funds of great institutions this was true, above ill, of international for myriads of shareholders. They had, no transactions. They might say that in time of doubt, the sense of the great responsibilities: crisis the printing press might be set to work which rested upon them. Let it not be thought to produce a certain number of notes in order, that the City was comp sed simply of a group to provide improvident and speculative of rich and grasping men, who were endeavour
méana of extricating theining to accumulate the vast fortunes which selves from the perils which they m st righteously fured in the annals of other countries. They: had decurved. But in regard to foreign were at their posts in order to promote the countries the position that every English prosperity of trade and finance in the country liability had to be paid iu goid was a tremendous at large. By their wisdom as they were wise, liability and one which the nation must face by their prudenc as they were prudent, by their and ought to know that it existed.
It was a capacity
as they had that capacity, they would truism that this country, with its tremendous help to mould to a great extent the cours of trade, with its overpow ring trade, with its busin as in the country at large, and to main- liabilities to foreign untries, was the one
tain by sound, orthodox, and unfantastic great country which held the smallest
measures that great structure of British trade reserve in gold. This the country and finance to the prosperity of which he now on which they all could pull. If money asked them to drink."
traders with
H
Was
will uever be permitted to exercise the power that Peking supposes them to hive, and that SHUM, when it sui s bis purpose, glibly declares them to have. The viceregal attitude toward this railway He has said within his scheme is pate it. heart, "If I am not to run this business, I
will wreck it". We indicatel a much when he experience! his first checkmat ', when public opinion proved too much for explanation of his motives, and of how the him, and when he published that crocɔdile people hul misauderstood his intentions. Our Canton correspondent has kept us posted as to other matters in which the viceregal finger has bee surreptitiously thrust in the pie, with which he now pretends he has nothing to de. the question of the funds in hand. special native bank wis at one time proposed to be instituted to take custody of the railway capital; that was the ide of SuUM, through his nominees. The people by whom the money was subscribel easily guessed what that might mean, and as a result of their agitation, our correspondent annunced that the
There wits
A
be
10 in uey was
The deposite with Hongkong banks. Hongkong merchants iuter.sted, who:n Viceroy Sium denounces as very trouble- some fellows, had alreuly taken steps so far as they could, and their representations to Peking have again resulted in Viceroy SHCM receiving a warning that the thread tha holds bim in Imperial favour has been unduly stretched by himself. The Board of Commerce agrees that ther; is reasonable ground for the shareholders' uneasiness, and orders that acsnis be preparel and all set in order so that the company my
be registered and taken over by th merchants according to Imperial Decree. The officials are to deliver up all the assets. Viceroy SHUM wanted to hold all he could, as
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